senate Bill S5111

Signed by Governor Amended

Relates to cemetery trust funds

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed by Governor
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actions

  • 10 / May / 2013
    • REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS
  • 04 / Jun / 2013
    • 1ST REPORT CAL.1110
  • 05 / Jun / 2013
    • 2ND REPORT CAL.
  • 10 / Jun / 2013
    • ADVANCED TO THIRD READING
  • 11 / Jun / 2013
    • PASSED SENATE
  • 11 / Jun / 2013
    • DELIVERED TO ASSEMBLY
  • 11 / Jun / 2013
    • REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS
  • 08 / Jan / 2014
    • DIED IN ASSEMBLY
  • 08 / Jan / 2014
    • RETURNED TO SENATE
  • 08 / Jan / 2014
    • REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS
  • 10 / Mar / 2014
    • 1ST REPORT CAL.248
  • 11 / Mar / 2014
    • 2ND REPORT CAL.
  • 12 / Mar / 2014
    • ADVANCED TO THIRD READING
  • 02 / Jun / 2014
    • AMENDED ON THIRD READING 5111A
  • 11 / Jun / 2014
    • PASSED SENATE
  • 11 / Jun / 2014
    • DELIVERED TO ASSEMBLY
  • 11 / Jun / 2014
    • REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS
  • 18 / Jun / 2014
    • SUBSTITUTED FOR A7802A
  • 18 / Jun / 2014
    • ORDERED TO THIRD READING RULES CAL.393
  • 18 / Jun / 2014
    • PASSED ASSEMBLY
  • 18 / Jun / 2014
    • RETURNED TO SENATE
  • 05 / Dec / 2014
    • DELIVERED TO GOVERNOR
  • 17 / Dec / 2014
    • SIGNED CHAP.509

Summary

Relates to cemetery trust funds; requires that when a cemetery corporation seeks to appropriate any percentage of its net appreciation in its perpetual care fund the cemetery corporation shall provide notice of such appropriation to the division of cemeteries as part of and in addition to their annual reporting requirements.

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Bill Details

Versions:
S5111
S5111A
Legislative Cycle:
2013-2014
Law Section:
Not-for-Profit Corporation Law
Laws Affected:
Amd §1507, N-PC L

Sponsor Memo

BILL NUMBER:S5111

TITLE OF BILL: An act to amend the not-for-profit corporation law, in
relation to cemetery trust funds

PURPOSE:

This bill would provide that the appropriation for expenditure of net
appreciation of cemetery trust funds would be subject to the standards
established by the Prudent Management of Institutional Funds Act which
governs expenditures by not-for-profit entities in the state.

SUMMARY OF PROVISIONS:

This bill would amend and update § 1507 of the Not-for-Profit
Corporation Law to direct that expenditure of net appreciation of
cemetery trust funds would be subject to the standards established by
the Prudent Management of Institutional Funds Act in Article 5-A of
the chapter.

The bill requires additional reporting requirements to the New York
State Division of Cemeteries and the New York State Cemetery Board
outlining a cemetery corporation's application of this standard.

EXISTING LAW:

Section 1507 of the Not-for-Profit Corporation Law does not provide
for application of the Prudent Management of Institutional Funds Act
but instead outlines a formula that is not consistent with other
not-for-profit organization management in the state.

JUSTIFICATION:

The existing statute is outdated and cumbersome as it relates to
expenditures of net appreciation of cemetery trust funds. The formula
is so difficult for cemeteries to utilize or understand that there are
almost no reports of the use of the existing process for expenditures.

This bill would conform these cemetery expenditures to the uniform
not-for-profit standard of the Prudent Management of Institutional
Funds Act. By providing this vital change, cemeteries will have
increased tools to aid their maintenance and preservation.

Review of this investment strategy will remain under the current
purview of the Division of Cemeteries and the State Cemetery Board
which is composed of the Secretary of State, Attorney General and
Commissioner of Health or their designees.

LEGISLATIVE HISTORY:

New Bill

FISCAL IMPLICATIONS:

None

EFFECTIVE DATE:


This act shall take effect immediately.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  5111

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              May 10, 2013
                               ___________

Introduced  by  Sen.  RANZENHOFER -- read twice and ordered printed, and
  when printed to be committed to the Committee on Corporations, Author-
  ities and Commissions

AN ACT to amend the not-for-profit corporation law, in relation to ceme-
  tery trust funds

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Subparagraph  2  of  paragraph (a) of section 1507 of the
not-for-profit corporation law, as amended by chapter 679 of the laws of
2004, is amended to read as follows:
  (2) The permanent maintenance fund is hereby declared to be and  shall
be held by the corporation as a trust fund, for the purpose of maintain-
ing  and  preserving  the  cemetery, including all lots, crypts, niches,
plots, and parts thereof. The principal of such fund shall  be  invested
in such securities as are permitted for the investment of trust funds by
section 11-2.3 of the estates, powers and trusts law. [The income in the
form  of  interest and ordinary dividends therefrom shall be used solely
for the maintenance and preservation of the cemetery grounds.] In  addi-
tion, the governing board of the corporation may appropriate for expend-
iture  solely  for  the  maintenance  and  preservation  of the cemetery
grounds a portion of the net appreciation, [realized  (with  respect  to
all  assets)  and  unrealized  (with  respect only to readily marketable
assets),] in the fair market value of the principal  of  the  trust  [in
excess of its adjusted historic dollar value, as defined in this subpar-
agraph],  as is prudent under the standard established by [section seven
hundred seventeen of this chapter (duty of directors and  officers)  and
as  limited by the maximum annual appropriation defined in this subpara-
graph. For the purposes of  this  subparagraph,  the  adjusted  historic
dollar  value  of  the  trust principal shall be the market value of the
principal three full calendar years prior to the effective date  of  the
amendments  made  to  this  subparagraph,  plus all subsequent additions

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10878-01-3

S. 5111                             2

thereto, minus all allowable deductions therefrom, adjusted by the  rate
of  inflation  as  measured  by the applicable consumer price index. The
maximum annual appropriation shall be sixty percent of  the  average  of
the  net  appreciation  in  the fund for the immediately preceding three
years, but only to the extent that it exceeds  the  adjusted  historical
dollar  value  of  the  fund  in the current year. Cemetery corporations
shall keep complete records of the adjusted historic dollar value of the
permanent maintenance fund] ARTICLE FIVE-A OF THIS CHAPTER, THE  PRUDENT
MANAGEMENT  OF  INSTITUTIONAL  FUNDS  ACT.  In the event that a cemetery
corporation seeks to appropriate any percentage of its net  appreciation
in  its permanent maintenance fund in accordance with this subparagraph,
the cemetery corporation shall [send a notice] PROVIDE  NOTICE  of  such
[proposed]  appropriation  [by  certified  mail] to the [cemetery board]
DIVISION OF CEMETERIES AS PART  OF  AND  IN  ADDITION  TO  THEIR  ANNUAL
REPORTING  REQUIREMENTS  AS  DEFINED IN SECTION FIFTEEN HUNDRED EIGHT OF
THIS ARTICLE, setting forth the amount of funds [to be] appropriated for
such expenditure and its effect on the permanent maintenance fund[,  and
certifying that such amount does not exceed the maximum annual appropri-
ation  defined  in  this subparagraph. Such proposed appropriation shall
become effective sixty days after receipt of  such  notice,  unless  the
cemetery board within such sixty-day period notifies the cemetery corpo-
ration  that  the board objects to the proposed appropriation]. Notwith-
standing the foregoing provisions of this subparagraph, all principal of
the permanent maintenance fund shall remain inviolate, except that, upon
application to the supreme court in a district where a  portion  of  the
cemetery  grounds is located, the court may make an order permitting the
principal or a part thereof to be used for the purpose of current  main-
tenance  and preservation of the cemetery or otherwise. Such application
may be made by the cemetery board on notice to the corporation or by the
corporation on notice to the cemetery board.  Unless  the  cemetery  can
clearly  demonstrate  that  it  lacks  sufficient future revenue to make
repayment, any such allowance from the permanent maintenance fund  shall
be  in  the form of a loan, and the court shall determine the method for
repayment of such a loan by the cemetery to the fund. [Any loan from the
permanent maintenance fund shall be ignored for the purpose of computing
the adjusted dollar value of the fund.  In  the  event  that  the  court
determines  that an outright grant of principal from the permanent main-
tenance fund is necessary, the amount of such grant  shall  be  deducted
from  the  adjusted historic dollar value of the trust principal for the
purposes of this subparagraph.]
  S 2. Subparagraph 2 of paragraph (c) of section 1507 of  the  not-for-
profit  corporation  law, as amended by chapter 111 of the laws of 2000,
is amended to read as follows:
  (2) The principal of such funds, whether kept in  the  perpetual  care
fund  or  otherwise, and unless already so invested when received, shall
be invested within a reasonable time after  receipt  thereof,  and  kept
invested,  in  such  securities  as  are permitted for the investment of
trust funds by sections 11-2.2 and 11-2.3 of  the  estates,  powers  and
trusts  law.  The  income arising therefrom shall be used solely for the
perpetual care and maintenance of the lot or plots or parts thereof  for
which such income has been provided. IN ADDITION, THE GOVERNING BOARD OF
THE CORPORATION MAY APPROPRIATE FOR EXPENDITURE SOLELY FOR THE PERPETUAL
CARE AND MAINTENANCE OF THE LOT OR PLOTS OR PARTS THEREOF FOR WHICH SUCH
INCOME  HAS BEEN PROVIDED, A PORTION OF THE NET APPRECIATION IN THE FAIR
MARKET VALUE OF THE PRINCIPAL OF THE TRUST AS IS PRUDENT UNDER THE STAN-
DARD ESTABLISHED BY ARTICLE FIVE-A OF THIS CHAPTER, THE PRUDENT  MANAGE-

S. 5111                             3

MENT  OF  INSTITUTIONAL  FUNDS  ACT. IN THE EVENT THAT A CEMETERY CORPO-
RATION SEEKS TO APPROPRIATE ANY PERCENTAGE OF ITS  NET  APPRECIATION  IN
ITS  PERPETUAL CARE FUND IN ACCORDANCE WITH THIS SUBPARAGRAPH, THE CEME-
TERY CORPORATION SHALL PROVIDE NOTICE OF SUCH APPROPRIATION TO THE DIVI-
SION  OF CEMETERIES AS PART OF AND IN ADDITION TO THEIR ANNUAL REPORTING
REQUIREMENTS AS DEFINED IN SECTION FIFTEEN HUNDRED EIGHT OF THIS ARTICLE
SETTING FORTH THE AMOUNT OF FUNDS APPROPRIATED FOR SUCH EXPENDITURE  AND
ITS EFFECT ON THE PERPETUAL CARE FUNDS.
  S 3. This act shall take effect immediately.

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